Oil prices flat as US-Iran peace talks face market scepticism

"While there are hopes for de-escalation, many investors remain sceptical, given that US-Iran talks have repeatedly broken down even after appearing to make progress," said Toshitaka Tazawa, an analyst at Fujitomi Securities.

"Until a peace deal is reached and free navigation through the strait is restored, WTI prices are expected to continue fluctuating between $80 and $100," he added.

Analysts from ING estimate that roughly 13 million barrels per day of oil flow has been disrupted by the closure of the strait, after taking into consideration pipeline diversions and the trickle of tankers that have passed through the gateway, they said in a note on Thursday.

With the US blockade on Iranian ports announced after the collapse of peace talks over the weekend, the disruption could increase.